Real estate speculators accused of preying on struggling towns like Jeannette

CBS News

5 days ago

At one time, Jeannette was known as the glassmaking capital of the world. But after the last plant closed in the early 80s, hard times followed. Today, the city would like to breathe life back into its downtown but says out-of-state real estate speculators are standing in the way.
"The hope and goal is to get every storefront on the avenue back up and running and booming with businesses and it's frustrating that we have out-of-state LLCs that play these games with these properties," city manager Ethan Keedy said.
It's a game played by speculators who buy and sell the mostly derelict properties sight unseen with hopes of making a quick buck. If that doesn't happen, the buildings just sit for years, with no plans to renovate or restore them.
"Every single one of these types of properties has an impact on its neighbors and the greater community," said Brian Lawrence of the Westmoreland County Redevelopment Authority.
"There are probably hundreds of these types of properties that are being owned out-of-state LLCs that continually perpetuate this problem of blighted, vacant, abandoned buildings," Lawrence said.
One example: a vacant storefront that may look OK on the outside but it's caved in and has no floor or roof.
"I don't know why anyone would buy completely sight unseen," Lawrence said.
And yet a California limited liability corporation bought the building in February 2022 for $3,100 and then turned around in November of that year, selling it to an LLC in Wyoming for $20,000. Today, the building and buildings like it continue to rot.
Another house is barely visible from the street with all the overgrown weeds and bushes that obscure it. Inside, it's a shambles of broken glass. And yet two partners from San Diego, California, bought it in 2020 for $1,000 and haven't done a thing with it.
Likewise, a vacant church has fallen into disrepair, but a Maryland investor bought it last year for $9,576. The city says it knows of no plans for any of these buildings and has been unable to get in touch with the owners about unpaid taxes and code violations.
But just why speculators are buying up Jeannette and other struggling towns remains a bit of a mystery. If they can't quickly sell, many of the buyers would seem to be stuck with properties considered liabilities. The city and county think there may be certain tax advantages but believe investors are putting up little money for potentially big returns.
"I think it's predatory. The places that this kind of stuff is happening — not just in Westmoreland County but across the state — it's tending to happen in communities that are already at a disadvantage in many ways. So it's doubly hurtful that this game gets played in places that deserve it the least," Lawrence said.